privatisation

[Pestilencia]

hello everyone,im applying to an internship in the u.s.a, and part of my application is to slove an economic problem in lebanon...i chose privatisation..
can anyone please give me some ideas.?..a little help would be appreciated..thank you

[Bullet Magnet]

http://en.wikipedia.org/wiki/Privatization

[METALLICA]

Originally Posted by Pestilencia

hello everyone,im applying to an internship in the u.s.a, and part of my application is to slove an economic problem in lebanon...i chose privatisation..
can anyone please give me some ideas.?..a little help would be appreciated..thank you

I'm not too sure I understood you well, but privatization is not a problem, it's a suggested solution to a problem.

Take for example EDL, sherket el kahraba, kahh rabba.

Corruption is deep rooted in this public firm, and privatization is one potential solution suggested by a lot of econimists.

Privatization should allow for more control on corruption, and in turn provide more profits. Rational firms, private or public always have that interest in mind.
But that is assuming there are corruption-free bids on the contractors & private firms. If those contractors are chosen to appease personal interests by someone in power, privatization changes nothing.

Think Solidere, it's a 'private' firm.

[Elyane El Helou]

Here is a gift from me to you that applies to Lebanon case

The International Monetary Fund and the Global Spread of Privatization

http://www.imf.org/External/Pubs/FT/.../pdf/brune.pdf

[>Watani<]

Lebanon's privatisation drive

Lebanon: Wednesday, October 05 - 2005 at 08:45
Lebanon will soon start its privatisation push as part of plans to attract foreign funds to help reduce its $36bn public debt. The government hopes to start selling its profit-making telecommunications companies and flagship carrier Middle East Airlines by December or January 2006, according to Economy Minister Sami Haddad quoted in a Reuters report.

[>Watani<]

Privatisation has more or less stopped at present in Lebanon. The Lebanese government has largely put all of its potential projects on pause; its priorities are to stabilise the political regime. The murder of former Prime Minister Hariri placed the government in a period of uncertainty, which is a turn-off to potential foreign investors. Without the financial input of investors and foreign banks, Lebanon cannot realistically afford to proceed with privatisation plans, which have regardless been pending for the last five years.

There are however some firms who have contributed to paving the way for privatisation, which should make it a smooth process when the ball starts rolling again. Dewey Ballantine and Abousleiman & Partners have together represented the Higher Council for Privatisation of the Lebanese Republic in connection with all of its privatisation projects. Dewey Ballantine is currently collaborating with the new government on reinitiating the overall privatisation scheme for the country.

Badri and Salim El Meouchi Law Firm has a good name for telecommunications privatisation work, having collaborated closely with the Lebanese government on legal reforms surrounding the status of public entities. It is at present advising a major Lebanese bank on the financing of the Libanpost BOT project with the Ministry of Post & Telecommunications.

Nabil Abdel - Malek's Law Offices is another firm with a good background in privatisation. The firm assisted the Ministry of Finance on developing its privatisation law, and has been in discussions for potential privatisation within the tobacco industry.

Nasri Antoine Diab Law Firm advised the Ministry of Economy and Trade on privatisation legislation and Tyan & Zgheib participated in the drafting of laws preparing for the privatisation of the electricity sector in Lebanon.

[>Watani<]

Country experiences

While the Social Watch country reports do not constitute a scientific study of private provision of basic services, they do provide a considerable amount of disturbing evidence about the impacts and processes of privatisation. In country after country we learn about price hikes and social exclusion, poor service quality, and the implementation of policies without even minimal levels of transparency. Privatisation proponents are likely to argue that the stories told in these reports are merely anecdotal. Yet as a body of evidence, the Social Watch reports reveal important patterns that simply cannot be dismissed, and make a compelling case for rethinking privatisation policies and budget austerity.

Process of privatisation

One of the most troubling aspects of the privatisation process identified by Social Watch reports from developing countries is external interference. Private provision policies are often imposed by multilateral lending institutions. During the 1990s, the World Bank, IMF and IDB conditioned major loan packages to Ecuador upon the privatisation of the public water utility. The financial institutions oversaw secret contract negotiations that guaranteed high returns and led to one of the most publicized water price hike disasters, and ultimately to a political crisis that eventually sent the private firm packing.

In Ghana, the World Bank?s Country Assistance Strategy (CAS)[2] ?classifies ?private sector involvement? in the provision, operation and management of public and social infrastructure as a key institutional reform?, which, when implemented, will increase levels of Bank financing. Similarly, in its 1998 CAS for Mexico, the World Bank pushed hard for the privatisation of electricity, despite massive popular resistance and a deplorable record of corruption and price hikes following previous sell-offs. (As of this writing, political opposition has stalled that privatisation drive.)

The Morocco report states that World Bank assistance in extending the water network to poor neighbourhoods was conditioned ?to the adoption of a policy adjusted to actual market prices, without considering either the special urban structure of these neighbourhoods or the solvency of their residents.? The Social Watch report for Bolivia, home to one of the world?s most notorious privatisation failures, explains how water policy was dictated from beyond national borders: ?Since the beginning of the 1990s, the World Bank had been demanding privatisation of the municipal water company, SEMAPA, as the only solution to the water problem in Cochabamba. In 1996, the WB conditioned a USD 14 million loan to SEMAPA to its privatisation. And in 1997, the IMF, WB and IDB conditioned debt cancellation of another USD 600 million to the privatisation of SEMAPA. ?the WB demanded a rigorous application of full cost recovery; and the company managed to establish a guaranteed high rate of returns during the negotiations. All these costs-reached by consensus during an absolutely secret process between the company, the government and local elites-were to be reflected in the water rates prior to any improvement in the water system.?

In addition, several Social Watch reports revealed instances of corruption, such as sweetheart deals in which well-connected bidders walked away with valuable assets for a fraction of their worth. In other cases, non-transparency has been a serious problem. In 2002, the Bulgarian government resold the failing International Water Ltd., responsible for serving 1.3 million customers, to a private bidder, but did not reveal to the public who the new owners were. Similarly in Nicaragua, in the late 1990s the government sold 95% of electricity distribution to a single Spanish company without disclosing the contract to its own citizens.
Impacts of private provision

Given its primary commitment, for Social Watch the ultimate consideration for analysis of privatisation, or any other economic policy, is the impact on the poor. It is in this area that the record of private provision causes the greatest cause for concern. By far the most pervasive impact of service privatisation identified in the Social Watch reports is increased prices, which inevitably lead to social exclusion. As the South Africa report wryly put it:The real citizens are those with cash.?

In the case of infrastructure services, privatisation has often combined a profit-maximizing incentive with monopoly power. Examples abound. During the late 1990s, the privatisation of electricity in Brazil led to a 65% increase for residential consumers, far higher than the rate of inflation. In Peru, privatised electricity companies, under no restrictions on setting tariffs, raised real prices by a factor of 14 between 1992 and 2002.

http://www.socialwatch.org/en/informesTematicos/58.html

[Deplorableness]

Originally Posted by Pestilencia

hello everyone,im applying to an internship in the u.s.a, and part of my application is to slove an economic problem in lebanon...i chose privatisation..
can anyone please give me some ideas.?..a little help would be appreciated..thank you

I Just Wrote a subject in my economics test ( i am a BAC II SE student ) about privatisation... i can help you with many important points :

*The first calling for privatisation was in 1978, it was going to happen for many reasons including doing an economical development, but back to 1978, this operation wasnt important and "ijbairiyi", they just wanted to do it just to has a better economical situation...

*When the civil war has finished back to 1989 - 1990, they had to do a privatisation operation to get out of this horrible economical situation...

*you can divide the privatisation to 2 genres :

B.O.T : which is taking the public sector from the government and developing it by the business ( private sector ) then the last one transfers it back to the government after a decided time... or building the sector/firm... by the private sector itself, then developing it to has the best production rate... then transfering it back to the government kamin after a decided time... for example : what happened with Cellis, and Libancell, the private sector built these 2 companies, then back to 2004, they transfered them back to the government... although, the Alfa company now, has a private administration... but still owned by the government, well having a private administration has many benefits ;)...

B.O.O : which is the worst form of privatisation, and to tell you the truth : i dont recommend it and so do Emil Lahoud... that's one of the problem between fa5amate al ra2is Emil Lahoud and the ex PM Rafik Al Harriri...
this form is about taking the sector from the government, developing it, then owning it forever... and here the government loses its revenues for ever!!!

*And now, the privatisation of the kahraba company is on, they are talking about it, because the company productivity is not +, which demands privatisation to be solved...

[Pestilencia]

thnx a lot guys for the help...i guess im gonna start writing my paper